California’s cities and counties are supposed to be halfway through an ambitious, state-mandated push to build millions of new homes. Instead, most communities — including nearly every one in Southern California — are falling well short of the pace needed to get there.
Every eight years, the state hands local governments a housing to-do list. Under Gov. Gavin Newsom’s administration, cities and counties are assigned targets for how many new homes they should plan for across four income tiers, from housing for the wealthiest buyers down to units affordable to the poorest residents. The goal is to keep pace with population growth while making a dent in California’s long-running affordability crisis.
This summer, a large swath of the state — including all of Southern California — hit the midpoint of its current eight-year planning cycle. The results, based on state housing data, are underwhelming at best.
Fewer than a third of California’s cities and counties are building enough market-rate housing to stay on pace with their targets. The numbers get worse from there. Only about 10% are keeping up with their goals for “moderate” income housing, roughly 13% for “low” income units, and a mere 6% — just 32 jurisdictions statewide — are on track for housing affordable to residents earning less than half the local median income.
Only five places in California are hitting all four of their targets, and most are far from the region: the unincorporated areas of Plumas, Napa, Yolo and Mono counties, plus the small Sierra foothill town of Placerville. Not a single Southern California city makes that list.
Take Irvine, one of the rare local success stories on market-rate housing. The Orange County city was told to plan for 8,671 above-moderate units by 2030 and has already permitted more than 6,000 — putting it ahead of most cities in that category. But when it comes to housing for lower-income residents, Irvine mirrors the broader statewide struggle: just 9% of its very-low-income target and 3% of its low-income target have been permitted so far.
Why the gap between paper plans and actual construction? For one thing, the numbers themselves are enormous. California’s current cycle calls for nearly 2.5 million new homes over eight years — more than 312,000 per year. Even during the state’s strongest building booms, in the early 1960s and mid-1980s, annual construction never approached that level. Despite a wave of new state laws designed to speed up housing approvals, California is still adding only a bit more than 100,000 homes a year.
Local government advocates argue that cities are being blamed for something outside their control. “Cities cannot require developers to develop and cities don’t build housing,” said Jason Rhine, a lobbyist for the League of California Cities. Local officials can rezone land and streamline permits, he said, but they can’t force builders to break ground.
Pro-housing advocates see it differently, arguing cities still aren’t doing enough to encourage development. “Cities can argue that they don’t directly control production, but they do control fees, zoning and permitting,” said Laura Foote, executive director of YIMBY Action. She said the state’s housing allocation system “is only as good as we have the political will to actually hold cities accountable,” and faulted state regulators, too, for not pushing harder on cities to adopt more development-friendly rules.
A spokesperson for the state’s Department of Housing and Community Development, Jennifer Hanson, said the agency is actively monitoring cities’ progress and enforcing commitments made in their housing plans. She pointed to recent state laws that exempt many urban infill projects from environmental lawsuits and require cities to allow taller buildings near transit stops, saying both have already helped move forward projects representing thousands of proposed homes.
Hanson also noted that plenty of factors driving whether homes get built are simply beyond any government’s control. “Whether a project moves forward depends on interest rates, construction and land costs, access to capital, insurance and expected rents or sale prices,” she said.
Affordable housing faces its own distinct obstacle: money. With rare exceptions, building homes priced for lower-income households in California requires public subsidies or investors willing to accept slim returns. State funding has been scarce since a 2018 voter-approved bond that fueled California’s main affordable housing subsidy program ran dry. Housing advocates are now hoping voters will approve an $11.25 billion state bond measure this November to refill that funding pipeline.
Housing for middle-income earners has its own bind. Moderate-income projects typically don’t qualify for the subsidies aimed at lower-income housing, yet the rents they can charge are often too low to attract developers seeking a profit without public support.
State lawmakers tried to create a workaround in 2017 with a law that fast-tracks approval for apartment and condo developments in cities that fall behind on their above-moderate, low- and very-low-income targets. In exchange for streamlined permitting, developers must include a share of affordable units and pay higher wages to construction workers.
Of the 212 Southern California cities and counties that reached the midpoint of their planning cycle this year, all but four missed their targets and are now subject to that streamlining law.
Even so, don’t expect a construction boom overnight. Developers have long argued that the law’s affordability and wage requirements make many projects financially unworkable outside of the most expensive rental markets. Since 2018, the law has helped approve nearly 28,000 units statewide — a meaningful number, but nowhere near enough to close California’s housing gap.
Original source: CalMatters
